Industrial production decreased 0.5 percent in October after having increased 0.2 percent in
September. At 114.0 percent of its 2002 average, total industrial production in October was 1.8 percent
above its year-earlier level. Output in the manufacturing sector fell 0.4 percent in October. The output
of utilities dropped 1.6 percent, primarily because of a decline in gas utilities; the output at mines fell
0.6 percent, reversing September's gain. Capacity utilization for total industry declined to 81.7 percent,
a rate equal to its year-earlier level but 0.7 percentage point above its 1972-2006 average.

The output of consumer goods dropped 0.7 percent in October; the decreases were widespread. Among
durable consumer goods, the production index for automotive products moved down 0.6 percent, its third
consecutive monthly decline; even so, the index was 5.2 percent above its year-earlier level. Elsewhere,
the production indexes both for home electronics and for appliances, furniture, and carpeting fell more
than 0.5 percent, and the output of miscellaneous durable goods declined more than 1 percent. The
production of nondurable non-energy consumer goods declined 0.5 percent because of losses in all its major
components: consumer chemical products, paper products, clothing, and foods and tobacco. After having
edged down 0.1 percent in September, the index for consumer energy goods fell 1.1 percent in October, as
the output of gas utilities was held down by relatively warm weather.

The index for business equipment edged down 0.1 percent in October. The output of transit equipment
rose 1.7 percent; the gain was led by continued strength in assemblies of civilian aircraft. The index for
information processing equipment fell 0.3 percent; the decrease was led by declines in the output of
electromedical equipment and of broadcasting, wireless, and other communications equipment. The index for
industrial and other equipment decreased 0.7 percent as a result of a large drop in the production of
construction equipment, which had jumped in September. The output of defense and space equipment advanced
0.4 percent in October.

In October, the index for construction supplies moved down 0.4 percent, its fourth consecutive
monthly decline; nevertheless, the index remained 0.1 percent above its year-earlier level. The index for
business supplies dropped 0.8 percent in October; the output of both non-energy business supplies and
commercial energy products fell.

The production of materials fell 0.4 percent in October after having risen 0.3 percent in September.
Within non-energy materials, the index for durable materials edged down 0.1 percent in October. A gain in
equipment parts was offset by a decline in consumer parts, which reflected lower output of motor vehicle
parts, and by a decrease in other durable materials. The output of nondurable materials fell 0.6 percent,
as a decrease in chemical materials outweighed a rise in paper materials. The index for energy materials
dropped 0.7 percent after having risen 0.3 percent in September.

Industry Groups

Manufacturing output decreased 0.4 percent in October after having increased 0.2 percent in September.
The factory operating rate declined 0.4 percentage point, to 80.1 percent, a rate that is 0.3 percentage
point above its 1972-2006 average. The production of durable goods moved down 0.2 percent. Notable
decreases were recorded in wood products; nonmetallic mineral products; fabricated metal products;
machinery; electrical equipment, appliances, and components; motor vehicles and parts; and miscellaneous
products. Increases occurred in primary metals, computer and electronic products, and aerospace and
miscellaneous transportation equipment. The production of nondurable goods decreased 0.4 percent after
having risen the same amount in September. Significant declines were registered for food, beverage, and
tobacco products; apparel and leather; printing and support; and chemicals. These decreases more than
offset increases in the output of paper and of petroleum and coal products. The output of non-NAICS
industries (logging and publishing) fell 1.5 percent.

The output of utilities decreased 1.6 percent in October. The output of natural gas utilities tumbled 7.7
percent; the output of electric utilities moved down 0.5 percent. The operating rate at utilities dropped
1.4 percentage points, to 86.7 percent, a rate equal to its 1972-2006 average. The output of mines
decreased 0.6 percent, and the capacity utilization rate for mining fell to 90.9 percent, a rate
3.5 percentage points above its long-run average.

In October, by stage of process, capacity utilization for industries at the crude stage fell 0.8
percentage point, to 90.2 percent, a rate 3.7 percentage points above its 1972-2006 average. The operating
rate for industries at the primary and semifinished stages decreased 0.6 percentage point, to 82.2 percent,
a rate equal to its long-run average. The operating rate for industries at the finished stage moved down
0.4 percentage point, to 78.3 percent, 0.5 percentage point above its long-run average.